Fixed Period, EOQ, and Single Period Basics
A product sells at the rate of 5 per day and the company operates 250 days per year. The carrying cost is $3 per unit per year and the set-up charge is $80 per set-up. There is a five day lead tie with a desired service level of 90%.
What is the EOQ?
What is the maximum inventory assuming zero safety stock?
What is the average inventory assuming zero safety stock?
What is the annual carrying cost?
What is the annual order cost?
What is the optimal period if a fixed period model were desired? (Time between EOQ and orders)
What is the target in a fixed period model if the period is 20 days?
What is the safety stock if sigma is 4 per day in the above target?
A quantity discount is available of 10% off the cost of $10.00 per unit. At a minimum order quantity of 1,000 what should the company order? (Keep H constant at $3.00)